8-KRegulation FD

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (Jul 15, 2016)

Filed July 15, 2016For Securities:AXP

Summary

This 8-K filing from American Express (AXP) on July 15, 2016, provides updated delinquency and write-off statistics for its U.S. Consumer Services (USCS) and U.S. Small Business segments for the months ending April, May, and June 2016, as well as the second quarter of 2016. The report focuses on card member loans held for investment, offering key performance indicators that are crucial for assessing credit quality and risk within the company's loan portfolios. Investors should note the slight increase in 30-day delinquencies for both USCS and U.S. Small Business segments in June 2016, reaching 1.1% for both, compared to 0.9% in April and May. However, the net write-off rate for USCS improved to 1.3% in June from 1.6% in May, while the U.S. Small Business write-off rate remained stable at 1.2% for the month. The filing also includes comparative data for the American Express Credit Account Master Trust, highlighting potential differences in reporting methodologies and portfolio characteristics.

Key Highlights

  • 1Provided updated delinquency and write-off statistics for U.S. Consumer Services (USCS) and U.S. Small Business segments for the periods ending April, May, and June 2016.
  • 2Reported a slight increase in 30-day past due loans for USCS to 1.1% in June 2016, up from 0.9% in prior months.
  • 3Showcased a decrease in the net write-off rate for USCS to 1.3% in June 2016, an improvement from 1.6% in May 2016.
  • 4The U.S. Small Business segment also saw its 30-day past due loans increase to 1.1% in June 2016, while its net write-off rate declined to 1.2% in June.
  • 5Total loans held for investment across both USCS and U.S. Small Business segments grew to $53.2 billion by June 30, 2016.
  • 6Included preliminary data for the three months ended June 30, 2016, offering a quarterly view of credit performance.
  • 7Provided comparative data and commentary on the American Express Credit Account Master Trust, acknowledging differences in reporting and portfolio characteristics.

Frequently Asked Questions

The primary purpose of this 8-K filing is to furnish investors with updated delinquency and write-off statistics for American Express's U.S. Consumer Services (USCS) and U.S. Small Business operating segments for the months of April, May, and June 2016, and the second quarter of 2016. This information helps investors assess the credit quality of the company's loan portfolios.

There was a slight uptick in the 30-day past due loan percentage for both USCS and U.S. Small Business segments, reaching 1.1% in June 2016. However, the net write-off rate for USCS improved to 1.3% in June, and for U.S. Small Business, it also decreased to 1.2% in June, suggesting mixed but generally stable credit performance with some areas of improvement in write-offs.

'Loans held for investment' represent the portion of card member loans that American Express intends to hold on its balance sheet and generate income from over time. Tracking the delinquency and write-off rates for these loans is crucial for investors as it directly impacts the company's profitability and risk exposure.

As of June 30, 2016, the USCS segment held approximately $44.6 billion in loans, while the U.S. Small Business segment held approximately $8.6 billion, for a combined total of $53.2 billion. In June 2016, both segments reported a 1.1% 30-day delinquency rate. The USCS segment's net write-off rate was 1.3%, and the U.S. Small Business segment's was 1.2% for the same month.